The Mayor of London, Boris Johnson, has announced his intention to fund two new schemes to help Londoners into affordable home ownership and accelerate the delivery of new homes.
Shared ownership helps people on low to medium incomes own a home, requiring much lower deposits, and will be given a funding boost of up to £180 million with The Mayor’s First Steps Challenge Fund. The Fund aims to accelerate the delivery of 4,000 new homes between 2015 and 2020 and is being made available on a recoverable basis so that money can be reinvested to provide more opportunities for affordable home seekers, helping achieve the Mayor’s aim of assisting 250,000 Londoners into low cost housing by 2025.
The Mayor is also giving up to £40 million of loan finance to Gentoo’s Genie for a new housing product where buyers will need no deposit or mortgage to purchase their home and at the end of the agreement customers own 100 per cent of the home outright. The scheme aims to deliver 2,000 new homes over the next 10 years, helping people who would struggle to save a large deposit for a mortgage.
The Mayor of London, Boris Johnson said: “Shared ownership is crucial in helping the unprecedented numbers of people in London desperate for good quality low cost housing.“
Gentoo Genie provides long term Home Purchase Plans for first time buyers and long term renters which enables them to buy shares in their home every time they make a monthly payment. This is the first time the scheme is being introduced to London following Genie’s work in the North East of England. The GLA’s funding is from the Mayor’s Housing Covenant revolving fund and will be repaid in full within ten years.
Steve Hicks, Managing Director of Genie, said: “We set up Genie as a way to help those people who want to get onto the housing ladder but who haven’t been able to because of a number of reasons, including saving for a deposit while renting. There has been a lack of innovation in the housing market which has left would-be homeowners feeling frustrated and unable to buy their own house. This 10 year partnership with the GLA will help customers into a minimum of 2,000 new homes in the capital who otherwise would have struggled to own their own homes, because of the difficult market conditions in London.”
The First Steps Challenge Fund is part of the £1.45bn the Mayor has secured from the Government for affordable housing delivery in 2015-18. The money is being made available on a recoverable basis and could take the form of an interest-bearing loan or equity investment, to encourage new players to deliver shared ownership homes and greater institutional investment into the tenure. When the funding is paid back it can be reinvested into delivering more homes. This is part of the Mayor’s London Housing Bank initiative to make longer term investment into housing and increase the pace of housing supply.